Drug Sentencing Reforms: Bottom Line (08/12)

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Aug. 12 (Bloomberg) -- On today's "Bottom Line," Mark Crumpton provides insight at the trading day's critical hour, with careful analysis of big events for investors. (Source: Bloomberg)

I am mark crumpton.

This is "bottom line." tonight, eric holder calls for major changes to the nation's criminal justice system.

Then, president obama forms a new group to review the nations tell -- intelligence activities.

Elon musk explains a futuristic transportation system.

To our viewers in the united states and those joining us around the world, welcome.

We have full coverage of the stocks and stories making headlines tonight.

Megan hughes , and phil mattingly.

Major changes to the u.s. prison system.

The proposal would scale back the harsher sentences for drug- related crimes.

The attorney general general said he also favors diverting people convicted of low level offenses to drug treatment and community service.

He is also looking to expand a prison program.

We need to ensure that incarceration is used to punish, deter, and rehabilitate, but not to warehouse and forget.

Today, a cycle of poverty traps too many americans.

Bloomberg's justice department reporter is in washington tonight with what this could all mean for the biggest investors and contrast are's in the business.

Good evening.

They laid out one topic on the issue called a pretty monumental series of proposals.

As you mentioned, this is something that will have an impact on the system.

There are two companies that work in this sector.

The top investors in these companies are funds.

When there is a reduction in prisoners, there is a chance this might have an impact themselves.

I think it is interesting to watch how the companies react if they try to make any changes if the efforts start moving across the u.s. system.

Republican democratic support.

This is not just a one-sided issue.

Can you explain that?

It is interesting.

On capitol hill, there is not a lot of agreement on anything much these days.

There is a convergence of support from the tea party side and the libertarian side.

They look at this as a way to cut funding.

On the democratic side moral issue.

Racial disparity.

We see bipartisan effort.

Both of these efforts today.

A way to cut funding.

On the democratic sidepresident obama and he would get behind these issues.

At a time when there is a not -- not a lot of agreement on capitol hill, something could get done.

There are big is this implications, as well.

A booming marketplace benefit -- benefits heavily from state reforms and overcrowding.

What are the implications for the company's? on the state level particularly, this is what we have seen.

States have moved toward a privatization system.

If they continue in the direction, this is something the companies might benefit from.

On the federal level, if there is a reduction in that population, there is a chance they could be ahead.

This is something to keep a close eye on going forward.

This afternoon, president obama signed something extent pushing a review board for the nations intelligence activities, as edward snowden's father planned a trip to russia.

Megan hughes follows that story and she joins us with the latest developments.

What is the purpose of the new group the president is creating echoplex what this does, the president from his vacation home is directing his national intelligence director to form a panel of outside experts, looking at government intelligence and looking at advancements.

How the government can maintain public trust.

This is something the president promised last week.

He has been under a lot of pressure from his own party to make these transparent after edward snowden and leak.

The leaks could also have major business repercussions.

All the concert -- consequences and sufferers, it is the companies that suffer the most.

It is one of the most dynamic sectors of the economy.

They are really good.

They dominate the world industry in this era that report from the information technology and innovation foundation said between 10 and 20% of non-us customers may avoid these.

What is the latest on edward snowden?

His father is trying to go see him?

At his right ear is he will be visiting his son in moscow very soon.

They have visa policies and a date.

He is looking ahead to his son's possible trial in the united states.

He believes lawmakers have made what he called irresponsible measures about the trial.

In the united states.

There were also rumors we would be hearing from snowden himself today.

What happened.

There was a twitter account verified to be at word snowden.

It said he would have a tv interview.

A spokesperson said he knew nothing about the interview.

Later, it was said the account was a host created by an italian journalist.

The count -- the account no longer verified by twitter to be edward snowden.

More ahead on the snowden case.

The increasingly chilly u.s. and russia relationship.

A post-soviet policy in colombia, we will get his analysis in the situation in 15 minutes right here.

Coming up, we will check tesla in extended hours.

Elon musk unveils his plans.

We will have the story next.

? this is "bottom line." after the bell, bloomberg news earn -- learned apple is preparing to injured is a new version of the ipad with a thinner design.

People familiar with plans told bloomberg apple also plans to introduce a new ipad mini.

The models are set to be introduced in the last three months of the year.

Let's take a look at the equity markets and how they finished the session.

The s&p 500 index gets his fifth drop in six sessions.

Investors await tuesday's retail sales report.

Let's look at the numbers.

The s&p 500 fell 1/10 of one percent, extending its loss from a record high 21.2%. -- hi two -- high to 1.2%. tesla.

Founder elon musk spoke about shares of his electric card maker and how they were downgraded today and to be hit.

-- despite today's drop, a screaming success and many investors were giving him a design.

This is the first peak at his high-speed travel idea, which looks like a double barrel shotgun that eventually shoot people 800 miles an hour to their destination.

Class it has been heavily studied.

I first looked at this in 1980. hyperlink is a great thing.

A way to think about it is a magnetic suspension.

It is basically a train and a tube that does not touch the wall and goes real fast.

I would like to see it come to fruition.

I think it might help if i did a demonstration article.

I think i probably will do that, actually.

More coming from the billionaire on his idea and what he wants to share.

We also saw a big moves on deals and earnings.

What happened there?

Getting a 475 million dollars takeover bid from an unidentified investment firm.

Shares from cisco plunged on weak sales.

The u.s. planned arrests.

An arrest warrant was artie sent to scotland.

The last years 6 billion dollars trading loss gave a black eye to the ceo, jamie diamond, and put the focus on a traitor known as the london whale.

Thank you.

More now on elon musk's clan -- plan.

He is calling it hyperlink.

If it sounds improbable, that is criticism he is used to.

Bloomberg is teaming up with big think, to bring a guide you to the forefront.

Listen to what he told them about how to achieve what some say is impossible.

It is important -- where is the industry static board in decline?

Where has it stayed the same or gotten worse?

Looking at the industries which allow people, think they are impossible, that is where it is.

In the space industry, things have gotten worse, not better.

Now, space shuttle is retired and the united states cannot get a single person in orbit without help from russia.

With off.

On the face of it, it appears to be daunting.

That i sign up for an industry dominated by giants with huge subsidies.

What those subsidies have done is made the company's very inefficient and reliance on those companies -- subsidies.

They are not willing to take risks.

Once you exceed them in capability of technology, they have no ability to catch up.

That is what we are finding.

The world will change dramatically in the 21st century.

Try to aim for a big rather than small problem.

Look for industries that have been stagnant for some time or inner -- or are in decline.

It is worth sending a company to change the way the industry behaves.

Much more tonight.

Be sure to catch our special edition on bloomberg television.

Coming up, follow-up between the united states and russia from the snowden candle may be hard to per -- to repair.

? welcome back.

The united states and russia need to work as grown-ups.

That is a quotation.

As of late, there has been a falling out on several subjects, not the least of which is the fate of edward snowden.

The professor of post-soviet policy at columbia university joins us on the phone tonight from massachusetts.

Welcome.

Thank you for your time tonight.

Thank you for having me here . assess the state of relations between washington and moscow.

Are they a sign of much bigger issues?

Collects in the last clutch of years, there were areas where the u.s. and russia could work together.

There was real cooperation on afghanistan where the russians helped to make sure u.s. supplies were able to reach the northern part of afghanistan and that was in both countries interest.

Cooperating on getting russia's world trade, and there was also cooperation on arms control, which was in both countries interest.

In the last year, there has been very few areas where the u.s. and the russians have seen eye to eye.

Not a lot of agreement and there are real limits as to what can be done in iraq.

The recent policy of obama was very successful, but there are not any core issues driving operation between the countries.

President obama canceled a planned summit meeting next month.

Did that escalate tensions or, did mr.

Obama have no other option?

In some ways, the canceled summit would have made good television if you would like to see two leaders uncomfortable in each other's presence.

There had been a long buildup of a lack of rye grass on four issues.

For a lot of people, it was a relief it did not happen.

A lot of people believe it is better not to have a vacuous or failed summit.

It is at or they can slip in the dog days august where few people are paying attention.

From a historical perspective, you have nixon, reagan, and they have all had much to your issues to deal with.

Why have president obama and president who not been able to get on the same page?

We really have to take into account historical context.

Russia is not soviet union.

The global reach the soviet union had to the point where in 1990 -- 9072, they could say it cannot be filed without the soviet union participation.

Russia is not in that position.

In some ways, there is a legacy of cold war.

The american president wants to have their moment.

Not the kind of issues that were in play in 1996 -- 1986. russia does not have an extradition treaty in the united states.

Why was the white house surprised?

Collects the snowden case is compensated.

There are reasons why the obama administration -- it is not the worst option.

If you were to come back to the united states, it would be a great distraction from the policies obama would like to pursue in his second term.

He does not want to spend his second term debating whether or not to national security agency was reading metadata or reading people's e-mails.

He would rather be talking about other issues that are far more important.

On the russian side, there was not a lot in it the u.s. could offer to mr.

Boudin -- has improved in -- president putin . and to see was up to the united states.

The united states and russia have been making efforts to improve ties.

They have strange and -- strengthened the relationship.

They granted russia permanent trading.

Do the recent tensions jeopardize the progress made, not to mention the market opportunities for american companies?

Not really.

U.s. business ties and russia have been weathering ups and downs for the last 20 years.

The important things to keep in mind is the u.s. russian economic relations are very small.

U.s. exports to russia, less than one percent of u.s. exports.

The same is true for russia.

Russia's exports to europe are the same as united states.

There is not a lot of economic leverage either side has over the others.

Not a lot either side can offer to the other to drive it.

Professor of post-soviet policy at columbia university joining us on the phone tonight from plymouth, massachusetts.

Thank you for your time and expertise.

We appreciate it.

Thank you.

Coming up, we will look at some of the creative ways businesses are dealing with the shortage of office space in hong kong.

? welcome back.

Thank you for staying with us.

Let's check back as we hit the bottom of the hour on this monday, half off.

Self-esteem.

Relatively flat.

S&p 500 down a little more than 1/10 of one percent.

The dow jones industrial average is falling as well.

It was down about one point.

The nasdaq composite index was the bright spot.

3669. let's get a check at some top stories we are following for you at this hour.

James has been convicted at -- of a string of crimes.

Many down -- he is currently 83 years old.

The mob boss stood silently.

President obama is on vacation and next week, he will take a bus tour and talk about the economy and the middle class area dos will include buffalo, syracuse, in new york state.

In florida, cracking the foundation of a crowded building in disney world.

The structure began to slowly toppled.

No injuries were reported here that is a look at the top stories in the news at this hour.

It is time now for the commodities report.

Su keenan is in the newsroom with details.

-- he commodities on a roller coaster ride.

Today is a perfect example.

This is being confirmed by the latest data.

It shows those rebounding gold are now raining bullish bets.

Once the fed starts to taper, and inflation has not really -- handout as anticipated.

Bullish position on coal by 27% as of last week.

Bearish bets , rose by an equal amount.

Check out what happened today.

The biggest one-day gain in gold.

A surge in china demand.

Also trading 51 higher than average today, which would be a sign.

Another trend we are seeing, bearish signs on agricultural positions.

They began keeping data in 2006. this is a big shift and it has a lot to do with a record short position we told you about.

The drastic increase in food supplies, but check out what happened today.

, better than 3.5% at one point.

The biggest gains in 13 months.

Last year, we were dealing with drought.

This year is heavy rain.

The aggie cultural department said a smaller harvests than forecast last month, the trading data -- data going in.

Now, we are seeing a shift as a lot of traders tried to adjust to what is happening now.

Tuesday?

A lot of focus at the pump on gasoline.

The biggest drop we have seen since july.

Midwest, prices fell $.11. we could see that continue toward labor day.

Oil is holding steady at close to $106. there is a prediction we will see the supply -- when the report comes out.

Thank you.

We begin with a significant day for china stock market.

Angie lau is in hong kong with the details.

Good day.

We have not seen the shanghai composite at these levels in two months, climbing at the 100 mark.

Close to two .4%. that is the biggest one-day gain since july 11. it all centers around growing optimism this week that china's slowdown may have stabilized after two quarters.

We have exports improving.

The positive eco-data is supporting a growing sense of optimism in china for investors.

The rally led by energy consumers.

Developers like china's second- largest real estate group climbed five percent.

With better macro data, investors putting money into cyclicals like money and property.

A new report that says -- how is the local economy dealing with the shortage?

Qwest people have done around the world.

How about turning rundown factories and warehouses into offices?

That is what some real estate and are doing.

It is the highest on record.

The prime office rents in central business district where bloomberg asia headquarters -- second highest in the world.

A lot of are expecting a high return on earned -- on investment.

54% from mid-2009. we are seeing vacancy rates shrinking.

Demand continually outstripping supply.

We are looking at these warehouses turned into offices.

A lot of people are doing that from their home as well.

Bank you.

Still ahead, extreme marketing to ridiculous heights where the daredevil approach to selling energy jenks when we continue in just a moment.

? welcome back.

This is "bottom line" -- energy drink company red bull has been making a name for itself in recent years with an innovative and eclectic marketing strategy that goes far beyond additional -- tools -- advertising tools . the formula one racing team, they have thrown a daredevil in space from 20 miles -- 20,000 miles up, and videos on their popular youtube channel.

Here is a look at surprising fax.

Amazing footage says the company's logo is associate with every extreme pursued today.

? meanwhile, it is that time of year where people pack up for summer holidays.

Most of us may be stuck in so- called cattle class, but some will have a chance to fly by private jet and they have been doing it for the past 50 years.

See how things have evolved . our first airplane, we renamed it the falcon 20. a famous telegram says we found our bird.

When we were first producing it, it barely went under 1000 nautical miles.

Today, it is capable of almost 6000. clients have been changing and evolving because they are looking for more real-time information in our early days.

If the wi-fi is not working, the airplane can be not available.

Being able to stay in touch with their office is critical to running a business.

People looking for -- to does major things.

Cabin comfort, and being able to get their quickly and efficiency -- efficiently.

Coming up, we will go to the latest crop report and find out what it means for farmers and consumers.

? rain had a big impact on cross-ice here.

Downpours have affected the outlook of crops like soy and soy beans.

A senior agricultural economist at kansas state university joins us from his office on campus in manhattan, kansas.

Welcome back.

Good to see you again.

Pleasure to be with you.

Last month, the agricultural department is forecasting record corn and soybean harvest.

Now the outlook is smaller harvest.

How much smaller?

We have got a change in the: from a 14 billion bushel crop to a 14.7 6 billion crop.

A smaller corn crop.

That is not overly concerning to the market.

Corn to a 1.7 billion.

The market is not concerned about corn going from a 1.8 down to a 1.9 bushel carry out at the end of the crop season next year.

Soybean tends to be more of the issue at this moment.

They slid into bear markets this year.

How does that impact cost for buyers?

What about the reputation record by it -- buyers would lift -- we had a drought last year and the year before that, so more than a single year of the drought.

We impacted food prices as cross became smaller.

And, commodity prices on corn , this year, it has not gone away.

Substantially lowered commodity costs due to the projection of bigger crops.

What type of weather risk premiums are the market is taking into account right now?

We have corn prices going down.

They are about 465, 463. they were teetering at under 450 a bushel.

Most in the market were saying how low can it go.

You mentioned the falling price.

Corn prices have fallen 43%. what might it mean for cash prices and will a domestic outlook still be at a record?

Today, a yield decrease in corn was projected at two bushels per acre.

I do not see that as a serious impact.

We will have to wait and see what the weather is like for the balance of the growing season.

They reduced soybean yields and also soybean harvest and acres by half a million acres.

To the other, that had a dramatic impact on soybeans.

They are more the concern because of a tight carry out this year and now for next year.

Corn does not look so dangerous at the moment.

We will have to wait and see how the rest of the growing season progresses.

We does not will a growing concern either.

Soy does look concerning.

Professor, among its many uses, soybean has grown as a feed ingredient for livestock.

Soybean posted the biggest game in months.

-- biggest gain in months.

Better income, provided they have a decent crop.

Soybeans are gathered late.

That is why the u.s. the aa three soy -- resurveyed and found they had rigged deuce did by half a million acres.

Soybeans are looking good right now.

There are areas in the country that are looking stressed.

They have the ability to rebound if moisture comes, and it could make a really good crop and farmers could be happy.

If the weather does not provide the rain necessary, we have a big problem with prices going up but the farmers would not have the yield to give them the returns they desire.

How to keep competitive during these types of weather and market conditions?

We are competitive on soybeans because there are only two producing markets.

If china or other nations want soybeans or soybean meals, they have to come to the united states and or south america with wheat and corn, we have more competition.

Prices, you have to realize, go up around the world.

It does not become a singular national issue.

What does this mean for consumers?

What can they expect when they go to the grocery store?

At this moment, consumers should see relief.

We have lower prices than we had last year or though year before.

I do not anticipate going back to anywhere near a dollar corn and $17 soybeans.

The consumer should not see a rise in food prices at the supermarket.

We could see stress on the beef market . j o'neill, the senior actor deck -- agricultural economist.

It is always a pleasure to have you on.

Thank you for your time tonight.

My pleasure.

Class coming up, a grueling race.

"hotshots" is next.

? that's a look at the futures market.

Bloomberg brings you a market check at 26 and 56 after each hour of the trading day.

Let's get you the bottom line on what is happening tomorrow.

Megan hughes and su keenan with a preview.

Political watchers will have an eye on new jersey special election for the u.s. senate.

A democratic i marry and new york mayor cory booker is leading in the polls and fundraising.

He has raised $8.6 million since the beginning of the year.

The general election will be held october 16th.

This left over by the death of senator frank lautenberg in june.

Drones are also on the agenda.

It is holding its conference in washington.

Outside, a protest has been planned by human rights activists.

That is a look at tuesday in washington.

What else is going on subiaco we heard the plan.

Bloomberg will be finding out what happens next.

The latest on the showdown between cable.

11 days since time warner cable dropped cvs from its system.

Leaving millions of viewers without access to the top-rated network.

We will take a look at what they boys are buying.

The latest quarterly earnings to find out what some of the biggest investors are adding to their portfolios.

Take investment focus on the latest retail sales.

Thank you both.

This text has been automatically generated. It may not be 100% accurate.

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